Escolar Documentos
Profissional Documentos
Cultura Documentos
EXECUTIVE SUMMARY
TABLE OF CONTENTS
CHAPTER PARTICULARS
List of Tables
List of Charts
List of Abbreviations
1
Introduction
Review of Literature & Design of Study
2.1 Introduction
2.2 Review of Literature
2
2.3 Statement of the Problem
2.4 Scope of the Study
2.5 Objectives of the Problem
2.6 Operational Definitions of Concept
2.7 Methodology
2.8 Limitations of the Study
2.9 Chapter scheme
3
PAGE NO.
I
II
III
LIST OF TABLES
SL
NO.
4.1
4.1.1
4.1.2
4.1.3
4.1.4
4.2
4.2.1
4.2.2
4.2.3
4.2.4
4.3
4.3.1
4.3.2
4.3.3
4.3.4
4.4
4.4.1
4.4.2
4.4.3
4.4.4
4.5
4.5.1
4.5.2
4.5.3
4.5.4
4.6
4.7
4.8
DESCRIPTION
Calculation for Banking Industry
Mean Return for Banking Companies
Variance for Banking Companies
Covariance for Banking Companies
Beta for Banking Companies
Calculation for Automobile Industry
Mean Return for Automobile Companies
Variance for Automobile Companies
Covariance for Automobile Companies
Beta for Automobile Companies
Calculation for Telecommunication Industry
Mean Return for Telecommunication Companies
Variance for Telecommunication Companies
Covariance for Telecommunication Companies
Beta for Telecommunication Companies
Calculation for Steel Industry
Mean Return for steel Companies
Variance for steel Companies
Covariance for steel Companies
Beta for steel Companies
Calculation for Petroleum Companies
Mean Return for Petroleum Companies
Variance for Petroleum Companies
Covariance for Petroleum Companies
Beta for Petroleum Companies
Calculation of Systematic and Unsystematic Risk
Calculation of Ranks
Calculation of Cut-Off Rate
PAGE
NO.
LIST OF CHARTS
SL
NO.
4.1.1
4.1.2
4.1.3
4.1.4
4.2.1
4.2.2
4.2.3
4.2.4
4.3.1
4.3.2
4.3.3
4.3.4
4.4.1
4.4.2
4.4.3
4.4.4
4.5.1
4.5.2
4.5.3
4.5.4
4.6
4.7
4.8
DESCRIPTION
Mean Return for Banking Companies
Variance for Banking Companies
Covariance for Banking Companies
Beta for Banking Companies
Mean Return for Automobile Companies
Variance for Automobile Companies
Covariance for Automobile Companies
Beta for Automobile Companies
Mean Return for Telecommunication Companies
Variance for Telecommunication Companies
Covariance for Telecommunication Companies
Beta for Telecommunication Companies
Mean Return for steel Companies
Variance for steel Companies
Covariance for steel Companies
Beta for steel Companies
Mean Return for Petroleum Companies
Variance for Petroleum Companies
Covariance for Petroleum Companies
Beta for Petroleum Companies
Systematic and Unsystematic Risk
Ranking
Showing Cut-Off Rate
PAGE
NO.
LIST OF ABBREVIATIONS
CHAPTER V
During the year 1st April 2012 to 31 March 2013 the market return is
0.053 and the market variance is found to be 1.654.
From the analysis it is found that all the 15 companies selected move
with the market index.
Out of the 15 selected companies having more excess return over beta.
The companies which are selected for constructing the portfolio are
Indian Oil Corp., Vijaya Bank, Reliance, Tata Steel, SBI and Jindal steel.
5.2 Conclusion:
Saving money is not enough. Each of us also needs to invest ones
savings intelligently in order to have enough money available for funding future
needs. Investment as we all know is a sacrifice of current money or any other
resources for the future benefits. But future is uncertain and risk is always
associated with the returns. In the market there are several investment
opportunity offering different benefits which make the investment a complex
activity. The investor who opts to invest in equity should have a portfolio.
Portfolio helps the investors to not only give higher returns but will also
diversity risk.
Sharpes Single Index Model is one of the most commonly used tools for
construction of portfolio. Hence here an attempt is made to construct an
optimal portfolio using Sharpes Single Index Model. Shapes Single Index
Model helps to formulate a well-diversified return and provide a portfolio with
most optimum return with minimum risk.
Hence this project will help the investors to invest in the portfolio of
companies which are fundamentally very strong and have good record.
Always have a portfolio which will not only promise higher returns but
will also diversify the risk.
Dont just worry about the returns but look the company itself and the
business it is in.
Do not panic if stocks goes down it is only a matter of time before the
companys stock would rise and if it doesnt happen right away, it
would happen in the near future.
Since the Sharpe ratio is used to characterize how well the return of an asset
compensates the investor for the risk taken, the higher the Sharpe ratio better
is the performance. Sharpe ratio is now used in many different contexts, from
performance attribution to tests of market efficiency to manage risk. The ratio
can be used to know how much additional return the investor receives for the
additional volatility of holding the risky asset over a risk-free Asset. Future
study can be done using different model like Treynor index model, Jenson
Index Model.
The portfolio can also be constructed using Technical analysis tool such as
knowing the indicators like ROC and RSI. The investors can also create
portfolio by understanding the charts and diagrams like Candle stick
approach, Bollinger charts etc. The investor can also perform trend analysis in
detail to know the stock price movements in future. Thus there are varies ways
to create portfolio which the investors can innovate and perform extensive
research over it.
REFERENCES
System of Referencing:
Books:
Prasanna Chandra (2008) Financial Management theory and
Practices for edition, Tata McGraw Hill Companies.
Roger F Murray and Frank E. Block (2002) Security Analysis fifth
edition, Tata McGraw-Hill Companies.
Frank K. Reilly and Keith C. Brown (2003) Investment Analysis and
Portfolio Management seventh edition, Thomson South-Western Press.
Journals:
International Journal of Advancements in Computing Technology (2011),
Optimizing Portfolio Construction using Artificial Intelligence.
International Research Journal of Finance and Economics (2009), The
Process of stock Portfolio Construction with Respect to the Relationship
between Index, Return and Risk.
News Papers & Magazine:
Investment and Pension Europe Magazine (2010): Portfolio Construction:
Broaden your horizons.
Websites:
Money control, stock prices viewed on 5/2/2013, in the money control
website, http://www.moneycontrol.com/india/stockpricequote
Bombay stock exchange, about Sensex, viewed on 6/2/2013, in BSE
website
http://www.bseindia.com/about/abindices
Economy watch, Banking Industry, viewed on 6/2/2013, in Economics
watch website http://www.economywatch.com/banking
Indian Steel, steel industry of India, viewed on 7/2/2013, website,
http://www.indiastelexpo.in/IndustryOverview.php
Automobile Industry, Automobile Industry of India, viewed on
7/2/2013, website, http://www.automobileindustryindia.com